A scrappage program is a government incentive program to promote the replacement of old vehicles with modern vehicles. Scrappage programs generally have the dual aim of stimulating the automobile industry and removing inefficient, more polluting vehicles from the road. Many European countries introduced large-scale scrappage programs as an economic stimulus to increase market demand in the industrial sector during the global recession that began in 2008.
Scrappage programs were touted with different names, mostly referring to an environmental benefit. The Vehicle Efficiency Incentive in Canada was based on fuel efficiency of cars. In Romania, this program was called "Rabla" (the wreck), and was launched by Dacia in 2000. In Germany, the economic stimulus program was called "Umweltprämie" (environmental premium) and in Austria "Ökoprämie" (eco-premium) while most of the public referred to it simply as "Abwrackprämie" (scrappage premium). Other countries have not tried to connect the program title with an environment aspect – still the Italian "Incentivi alla rottamazione" (scrappage incentives) and French "Prime à la conversion" (scrappage premium) require the new car to meet modern emission standards. The German scrappage incentive scheme and the British scrappage scheme do not have such requirements, and the UK scheme was openly sketched on the target to provide financial support to the struggling motor industry. Similarly, the United States Congress devised a scrappage scheme, commonly referred to as "cash for clunkers," as part of a general Automotive Stimulus package series; however, the voucher is only given when the newer car has a better fuel efficiency compared to the old car.
In the 1990s, many countries had introduced tax rebate programs for new cars that meet a modern emission standard, but, with the Kyoto Protocol; some countries made the public offer dependent on the scrappage of old cars.
Other programs with the same goal of stimulating industry and increasing efficiency include the Cash for Caulkers plan to promote replacing old refrigerators, air conditioners, etc. with newer, more efficient appliances.